Evol. Inst. Econ. Rev. 4(1): 27–53 (2007) ARTICLE Karl Marx after New Institutional Economics* Ugo PAGANO Department of Economics, University of Siena, Siena, Italy and Central European University, Budapest, Hungary. E-mail:
[email protected] Abstract In this paper, we consider the two main causation mechanisms characterizing the Marxian theory: the one running from productive forces to relations of production (Marx I) and the other moving in the opposite direction (Marx II). We argue that Marx did not achieve a satisfactory integration of the two mechanisms and that he failed to point out how multiple technological-institutional paths may stem from the cumulative interactions between relations of production and productive forces. In spite of many important analytical insights, NIE has exacerbated the primacy of technology and productive forces, which characterized “Marx I”. After NIE, the analysis of the complex relations between “Marx I” and “Marx II” can still help to extend the scope of institutional theory and, in particular, its application to the comparative analysis of models of capitalism coexisting in the global economy. Keywords: Marxian Theory, New Institutional Economics, organizational equilibria, institutional complementaries. 1. Introduction The main claim of this paper is that there are some parts of Marxian theory that, together with “Old-Institutionalism”,1) can be used to improve upon the important contributions of New Institutional Economists, like Coase, Alchian, Demsetz and Williamson, who have greatly helped our profession to overcome the sterility of the neoclassical theory. In this paper I will draw a schematic distinction between two Marxes—a senior brother Marx (or Marx I) and a junior brother Marx (or Marx II)—which will strike JEL: B130, B140, B250, P100, P140.